Problem Set 1 - due 2/6/20 ECN 312 - Intermediate Microeconomic Theory Spring 2020 Please make sure that your problem set is legible and stapled. Please write your name and section number on your problem set. On your graphs, please label antes, cumes, intercepts, slopes, and all points relevant to the question. Explain your work thoroughly in order to receive full credit. Possible points are given in parentheses. 1. (25) Paul has preferences over balls (B) and skateboards (S). A ball has a prioe1 P3 = 10. A skateboard has a price1 Pg 2 20. Consider that Paul receives 5 balls and 5 skateboards for his birthday (along with gift receipts so that he may return items for their purchase price). (a) (5) Plot and label Paul's endowment (the bundle he starts oil with) in the space of B and S. Put B on the horizontal axis. (b) (5) Calculate the intercepts of the budget line. Use these points1 along with the endowment from (a), to draw Paul's budget line. Use a separate graph from (a). (c) (7.5) Now consider that there is a 25% restocking fee for returned skateboards. Draw Paul's budget line. Use a separate graph. (d) (7.5) Ignore the restocking fee described in (c). Now consider that there is a promotion. Specically, balLs are 50% oil. Draw Paul's budget line under this promotion. Use a separate graph